Margin expansion in 23E; Volume growth in 24E_股票频道

（以下内容从招银国际《Margin expansion in 23E; Volume growth in 24E》研报附件原文摘录）
浙江鼎力(603338)
We believe the listing of Horizon Construction (9930 HK, BUY), the majorcustomer of Dingli in China market, will enhance the visibility of Dingli’s AWPorders over the coming 1-2 years. Besides, we expect Dingli to deliveraccelerating sales volume growth in 2024E upon the commencement of smartfactory with annual capacity of 4,000 units of AWP. On the margin side, weexpect Dingli to deliver meaningful gross margin expansion given the decline infreight rate and steel cost, as well as the appreciation of foreign currency againstRMB. We revise up our earnings forecast by 2%/5% in 2023E/24E and raise ourTP to RMB67, based on 23x 2023E P/E. Maintain BUY.
Horizon Construction to boost its AWP fleet after the recent IPO.Horizon Construction raised HK$1.5bn (or ~RMB1.4bn) in May. We expectHorizon to boost its AWP fleet size by 15%/20% in 2023E/24E, throughdirect procurement or cooperation with external lease companies (fordetails, please see our report “Horizon Construction – No.1 equipmentoperation service provider ready to capture the opportunities in AWP” (link)).We believe Dingli will be a key beneficiary, as Horizon has long been a keycustomer (Based on our calculation, revenue from Horizon accounted for11%/34% of Dingli’s total /China revenue in 2022).
New capacity to drive growth in 2024E. The main construction work ofDingli’s new smart factory has just been completed and the manufacturingequipment is now at the testing stage. The factory is mainly for theproduction of boom lifts (36-50 metres) and scissor lifts (33-36 metres). Weexpect the factory will commence operation starting from 2024E. We believesales volume growth will accelerate.
Raise earnings forecast by 2%/5% in 2023E/24E. We revise down ourrevenue forecast by ~17% in 2023E-24E as we previously modelled somecontribution from new capacity starting from 2023E. That said, we revise upour gross margin assumption by 4-5ppt in 2023E/24E given the decline infreight rate and steel price. Besides, the appreciation of USD and EURagainst RMB since early this year will enhance Dingli’s margin. All in all, ourearnings forecast is revised up.
Higher multiple to reflect growth acceleration. We revise up our TP toRMB67, based on 23x 2023E P/E (previously 25x 2022E), on the back of23% earnings growth in 2024E. Our target multiple remains well below thehistorical average of 31x.
Key risks: (1) Further intensified competition in China AWP market; (2)sharp rebound of RMB rate.